Industry News

Trump Bashes Insurance Industry

June 17, 2002

Real Estate Mogul Says Insurers ?Ought To Be Ashamed Of Themselves?

By Marcie Geffner Inman News Features

New York City?Hotels may be hurting and office space may be standing vacant in the Big Apple, but real estate developer Donald Trump is no less than completely confident about selling the luxury apartments now on the market at his newest property, The Trump World Tower at the United Nations Plaza.

Trump said the Big Apple?s luxury condominium market is the best he?s ever seen even though the city?s hotel business is "not great, to put it mildly," the office market is "okay at best" and the rental apartment market is "not good."

"Condo prices are twice as high today as they were in 1999, so even if you discount a little, it?s still a high price," he said.

Trump?s newest New York building is located on 48th Street and First Avenue and cost $300 million to build. The 374 luxury apartments are priced from $952,500 to more than $13.5 million and are expected to fetch $700 million in total.

The building has sweeping views of New York City, the United Nations and the East River and is billed as "the tallest and most spectacular residential building in the world," according to a sign affixed to the exterior.

Trump spoke in the lobby of the building to reporters who were in New York last week for the National Association of Real Estate Editors conference.

He touted the building?s four-pipe heating and cooling system, which provides either heat or air-conditioning year-round, and he said the building benefits from extensive security in the neighborhood due to its proximity to the United Nations.

"We have great security, and we get it for nothing," he said.

Proximity to the U.N. is expected to make the property an attractive U.S. residential address for foreign ambassadors, Trump said. The sale of one penthouse to an unnamed foreign national buyer fell through recently, netting Trump a $10 million forfeited deposit.

"That was even better than selling it," he said.

The concrete high-rise building is 72 stories and almost 900 feet tall, according to Skyscrapers.com. Construction was started in 1999 and completed last year. Amenities include a spa and health club with a 60-foot swimming pool, a restaurant, a private wine cellar and international cocktails bar, a landscaped garden, around-the-clock concierge, doormen, security and service staff and valet garage parking.

Trump rudely sidestepped an Aspen, Colo., reporter?s question about whether the building contains any environmentally friendly features by brushing off the entire concept of so-called green building.

Asked about the World Trade Center, Trump said he favors rebuilding a tall tower on the now "broom-clean" site and allotting some space for a memorial.

"I would love to see a tall tower built at the World Trade Center, but there has to be healing period first," he said. "A big section should be set aside for a memorial, but not all of it."

The real estate developer also used the opportunity to bash property and casualty insurance carriers over the issue of terrorism insurance coverage.

"The insurance companies are ripping off everyone?homeowners, building owners?and they ought to be ashamed of themselves," he said. "I hope the U.S. government will provide for insurance for terrorism.

"The insurance companies are making it impossible to building big buildings. It?s good for me because I already have buildings, but I still am going to build more."

The press conference was followed by a reporters? tour of a penthouse apartment in the luxury residential building.